California Multifamily Split HPWH Market Study

This project will assess the market opportunity and technology performance of new split heat pump water heater (HPWH) designs for direct replacement of inefficient gas (including natural gas and propane) and electric water heaters located in constrained spaces in California multifamily buildings. Split HPWHs differ from integrated HPWHs, allowing the storage tank and the heat pump unit to be in different locations.  For many multifamily buildings and mobile homes, the existing water heater tends to very small capacity (less than 40 gallon or “low boy”) and often located in interior closets or other space constrained areas within an apartment or home. Currently, there are three ENERGY STAR split HPWH models available in the U.S. market, but only a single model offered in a compact tank size (43 gallons). However, increasing performance and diversity of HPWH models and demand for HPWH solutions to address constrained multifamily and mobile home applications is advancing the development of new split HPWH models in 2025. The project will define and quantify the potential opportunity for this technology in California through detailed market data analysis, direct stakeholder interviews and building energy modeling to qualify the pathway and impact of these new, alternative heat pump technology options for existing energy efficiency and demand-side management programs. Although the project research will primarily focus on multifamily building applications, the energy modeling will also include an assessment of potential impacts of split HPWH applications in mobile homes. Conventional and high efficiency measure research will include gas and electric plug-in 120V and hard-wired 240V supply equipment, as well as “low boy” and “slim” compact water heater designs. Throughout this project we will review the growing knowledge about these products by coordinating closely with national and other state-wide initiatives and California programs such as the Northwest Energy Efficiency Alliance (NEEA), TECH Clean California (TECH), Self-Generation Incentive Program (SGIP), California Market Transformation Program (CalMTA) and existing low income and market rate multifamily programs. We also will coordinate with implementation teams for the Equitable Building Decarb program on how these products can fit into their program offerings. This project will build on existing research including a 2023 field evaluation of plug-in 120V HPWHs that included a split HPWH model, but additional manufacturers and models offered currently outside of the U.S. will be included in the market research. The project team will leverage existing research and findings captured in recent CalNEXT projects including the Low-Income Multifamily Housing Characteristics Study (ET22SWE0033), Multifamily In-Unit Heat Pump Study (ET22SWE0035) and the Emergency Replacement Heat Pump Water Heater Market Study (ET23SWE0020). Based on tenant, building owner and manufacturer interviews, and installation data, the market study will identify the key barriers and decision factors, as well as provide recommendations for increasing the opportunity for lower cost split heat pump water heaters in existing California buildings.